The dollar is holding well so far this week thanks to the solid US employment data published Friday on top of the Chinese yuan devaluation today. While we see the greenback rallying against Asian FX and commodity currencies
right now, the euro
is holding. I still anticipate renewed buying pressure on the dollar over the medium term and am interested in a short opportunity on the EUR/USD
at the $1.11 level ( trend line
resistance). Technically speaking, a reversal below this level would probably see prices fall back to $1.08. If this does indeed happen, I would expect this support to break, at which point I would target $1.05 (and hopefully new year lows by September). A stop above $1.115 with a entry at around $1.1100-20 will allow for a risk/reward ratio greater than 1:5.